It troubles me that predictions for future financing of alternative energy, or future deployment of electric cars, or future demand for coal, or future sea levels tend to be based on assumptions of smooth changes. At least, those widely discussed.

Where are the projections that take into account likely disasters?

For example, South Asia gets a lot of its water from groundwater supplies, which are drying up. Also, the Himalayan supply is likely to change because of global warming, probably in the direction of less water. Living conditions are crowded and unsanitary. Meanwhile, the population is growing, and presumably wanting to have western-style amenities: cars, air conditioning, steak.

Is there a place to look that takes these into account and says, essentially, ok, look. India is not going to keep growing. It's a lot more likely to suffer a simultaneous famine and plague wiping out half the population, so don't worry about providing them electricity because they're not going to be there to enjoy it. Or something.

It just seems like futurist discussions tend to go along the line of "Well, everybody in China wants a car--a big American-style car--so therefore the oil supply is doomed. Or "Everybody in the U.S. wants to drive an SUV, so the supply of oil must be maintained at such-and-such a rate." But we know those things aren't true; people would park their SUVs if gas was $5 (or, more likely, $20) per gallon. They would want to drive little Hondas and scooters and, one shudders to think it, even bicycles.

Surely there is such a source, perhaps in "Proceedings of the Doom and Gloom Society" or something like that...

The thing about modelling such discontinuities as a major plague is that the result you get depends crucially on the timing and sequence of events. It's not the same thing at all whether the tuberculosis plague that wipes out half of Africa occurs before or after the development of multi-resistant strains.

Another point is that any sufficiently large discontinuity will dislocate the institutional framework (or, at the very least, the people currently manning that framework) to such an extent that it will be difficult to put any meaningful contingency plans into action.

In the case of a serious nuclear war, for instance, there just isn't any sense in making plans for what happens "after" - not because there won't be an "after," but because "after" won't involve most of the people who are able to make plans right now (at least not in any position where they'll be able to act on their plans).

The new projections, published this month in the American Meteorological Society's Journal of Climate, indicate a median probability of surface warming of 5.2 degrees Celsius by 2100, with a 90% probability range of 3.5 to 7.4 degrees. This can be compared to a median projected increase in the 2003 study of just 2.4 degrees. The difference is caused by several factors rather than any single big change. Among these are improved economic modeling and newer economic data showing less chance of low emissions than had been projected in the earlier scenarios. Other changes include accounting for the past masking of underlying warming by the cooling induced by 20th century volcanoes, and for emissions of soot, which can add to the warming effect. In addition, measurements of deep ocean temperature rises, which enable estimates of how fast heat and carbon dioxide are removed from the atmosphere and transferred to the ocean depths, imply lower transfer rates than previously estimated.

....

"There's no way the world can or should take these risks," Prinn says. And the odds indicated by this modeling may actually understate the problem, because the model does not fully incorporate other positive feedbacks that can occur, for example, if increased temperatures caused a large-scale melting of permafrost in arctic regions and subsequent release of large quantities of methane, a very potent greenhouse gas. Including that feedback "is just going to make it worse," Prinn says.

... to be done with projections, its to be done with scenario planning to test the resilience of the plans that have been made.

After all, most of the catastrophes that can happen don't, but when catastrophes do happen, we are not hit by "an average of 4% of 25 different catastrophes", but by the particular ones that kick up.

Of course, one of the ways that you increase projected profits is by cutting back on provision for contingencies, which is why stretching maximizing returns to the limits normally means you are unprepared for the unprojected and in fact results in lower realized return over a long term than strategies that include being prepared to cope with the unexpected.

Of course, one of the ways that you increase projected profits is by cutting back on provision for contingencies, which is why stretching maximizing returns to the limits normally means you are unprepared for the unprojected and in fact results in lower realized return over a long term than strategies that include being prepared to cope with the unexpected.

This certainly applies to the society and economy as a whole, but particular CEOs and other corporate officers only really have their time in those offices to make the really big personal profits, tens of millions to billions of dollars. With those kinds of compensation schemes, there is absolutely no incentive for them to think longer than their own probable term in office, except, perhaps but unlikely, the chance that they might be interested in statutes of limitation.

Yes, return over the long term and return over the short term are not only different, but different in systematic ways that we have known about for decades.

Pretending that stock options maturing in a quarter or a year is a performance incentive is part of the kabuki theater where people living in the real world know its bullshit, and most ivory tower mainstream economists have no idea that their models are quite conveniently blind to the problem, because their models are how they talk about potential problems, and their models have no syntax to describe the problem.

It was quite noticeable going to one of the few remaining doctoral grad schools that offered formal training in institutionalist economics, the majority of the non-orthodox students had done something else between getting their bachelor's degree and going to grad school, while the majority of the mainstream students went straight through. And we have two and three generations of economists who are just like that ... being forced to take economics, seeing something in the models that they liked, being good enough in math to get an assistantship, being inducted into the modeling skills and pointed in the direction of a data set to do their doctoral work on ...

... and entirely clueless that what they see filtered through their models omits so much about the economy in the real world.